New distribution EVOLUTION

Are changes in airline distribution finally picking up speed? Linda Fox charts the latest NDC developments

The industry has gone from trying to understand it – and the motivations behind it – to a collaborative approach to how it might be implemented. Now, finally, it's starting to be put into action.

But while there is collaboration, partnerships and engagement from all sides, technically speaking the industry isn’t there yet. Like most technological evolutions, this is not something that will simply happen overnight.

A spate of recent announcements from large TMCS shows progress, but when you read between the lines it's all still about pilots and trials and not yet close to full deployment.

In the late summer Travelport did its first live bookings for Qantas via the NDC standard, and using its Smartpoint agency technology. FCM, and parent company Flight

Centre Travel Group, announced recently that they had completed NDC airline content booking via Amadeus Selling Platform Connect. American Express Global Business Travel says the latest release of its Neo tool connects to both Amadeus and Sabre’s NDC solutions and Concur is integrating British Airways and Lufthansa NDC content into its Triplink system. And most recently Expedia’s business travel arm, Egencia, announced that it was making Lufthansa NDC content available to its customers.

But while all of these developments might give the impression that NDC is ready for wider use, patience is still required. Nicola Ping, Manager Air Content and Distribution, EMEA, for FCM and Flight Centre, says there is still some confusion.

“IATA is telling the industry that 70-plus airlines are doing NDC, certification is progressing and the standards are ready.

The airlines are telling their agents and customers that they have a lot of capability and transaction volumes are growing. Both of these things are true but the vast majority of

ATA’S New Distribution Capability (NDC) was recently likened to a child born prematurely that's only now beginning to find its feet. It’s not a bad analogy when we think back to 2012, when NDC was first announced, and look at where we're at today.

transactions are coming from straightforward leisure bookings.”

Commercial considerations

Others in the industry also acknowledge that progress is being made but point to the remaining challenges that are now becoming apparent.

David Chappell, Technology Director for Fello Travel, says: “There is real progress with NDC and it’s evolving at pace. New standards and new versions of NDC are being evolved (two per year) with, finally, good engagement between airlines, retailers and aggregators.”

But therein lies one of the challenges. NDC was meant to set a standard but as new versions become available, airlines are developing their own different versions of that standard. Chappell believes airlines will not want to keep investing in every new version and will choose to make “step changes in the standard when there are commercial advantages to the enhanced functionality in the later versions”.

There are varying views as to whether the

announcements are meaningful or not. While some might say that at least they are keeping visibility on progress, and keeping discussions going, others believe the time to sing from the rooftops is only when the NDC standard can do what it set out to do. David Bishop, Commercial Director of Gray Dawes Group, falls in to the latter camp.

“When airlines, aggregators and GDSS can manage the whole range of shop, book, issue, pay, refund, exchange/change and void then, yes, this is something to shout about,” he explains. Bishop thinks NDC at scale, which is needed for all the other elements above to fall into place, is about 18 months way with the key airlines.

Behind closed doors

Once that technical base is there, there must be commercial discussion around how NDC content will be distributed to the TMC community more widely, especially for smaller agencies. These talks will take place behind closed doors and it’s unlikely they will happen quickly, fuelling further uncertainty.

Some believe the time for “honest and open” discussions is now. Bex Deadman, Commercial Director of Blue Cube Travel, describes the conversation as “a triangle of trust between the TMC, airline and corporate – and those that can step into it are potentially paving the way for the corporate travel industry of the future”. She maintains that the issue is already slowing progress.

Going forward, airlines will want to see a return on their investment in developing and delivering NDC content but it’s harder for agents to invest in and adopt something when the future picture remains unclear.

That also leads to the belief from most in the TMC community that there will be more sticks than carrots when it comes to driving any new distribution process.

However, many are seeing opportunities for agents too in terms of the ability to negotiate with airlines on a one-to-one basis around ancillaries, for example.

Gray Dawes’ Bishop says it is up to agents to negotiate deals with carriers to make NDC capabilities work for them.

“I’m happy with this as it encourages us to invest knowing the returns are there. This is one of the drivers behind our retail strategy. We’re working with two universities on this. We need to get an ROI and this is a key component. If we help the airline sell high margin products and ancillaries, we should be rewarded,” says Bishop.

Taking it one step at a time

With so many twists and turns in the NDC journey, it’s easy to skip over other developments in distribution. IATA’S Oneorder is now on the radar, according to TMCS, who are keen to be involved at the early stages to ensure the industry works together.

Deadman says it is being spoken about but believes there are other challenges to overcome first: ”For TMCS it will really force us to think about our proposition as many of the things we place value on will no longer exist. But it is important not to run before we can walk. It's easy to get seduced by technology without fully realising the problem you are trying to solve.

While online booking tools are said to be the most frequently integrated element of the travel programme, it seems further integration can be left on the table.

In a poll of travel buyers worldwide, carried out by the Association of Corporate Travel Executives, 72% say their travel programme is only somewhat integrated.

Findings from The Journey to Integrated Travel Management whitepaper, which is supported by American Express Global Business Travel, also reveal that many travel managers (22%) have no plans to integrate further, which seems surprising given the holy grail of end-to-end integration.

After online booking tools, corporate cards and expense management platforms are the most commonly integrated elements of programmes. Perhaps travel managers perceive further integration as too challenging. Respondents cited a number of barriers to integration, including the business travellers themselves.

Integrated systems and processes are not only a good thing in terms of existing technologies but also for bringing in newer tech. Companies which take strides to integrate existing systems should find it easier to add in new channels.

Flight Centre Business Travel is one company that has thought about changing consumer expectations and the need for technology to keep up. The company’s new booking tool, HELLOFCBT, was recently launched because it wanted to offer an online booking service. UK General Manager Joe

Beevis says other elements, such as traveller tracking and FCM’S travel management app Sam, have also been built into the system.

Beevis adds: “FCBT’S systems are all fully integrated and we have actively avoided developing a platform reliant on punch-outs. All air, hotel and rail bookings flow into the same platform for our travel consultants allowing effective travel management.

“We’re introducing Sam to make this process even smoother for the customer.

All bookings made both online and offline will integrate into Sam, providing a seamless automated itinerary management experience, whilst also keeping travellers up to date via various alerts.”

Despite challenges from travellers, the ACTE report found 34% of respondents believe travellers are also seen as a driver for integrated programmes, which perhaps suggests the ongoing need for managers to strike a balance between those reticent to adopt new ways of doing things and those demanding them.

The report goes on to cite lack of internal and stakeholder support as further challengers to integration for 30% and lack of resources for 25%. However, 28% say incompatible systems are holding back further integration.

The report also highlights the necessity of buy-in from internal and external stakeholders, with 62% of travel managers citing support from tech platform providers, 59% saying travel management companies and 39% citing payment providers as instrumental in helping achieve integration. It’s no surprise that travel managers see advantages in integrated systems, such as spend visibility and expenses control for 70%, duty of care for 58% and improvement in user experience, according to 65%.

Leigh Bochicchio, Executive Director ACTE, says: “Having to navigate a constellation of tools and technology to plan a trip can hinder productivity for travellers. End-to-end travel programmes solve this issue, and at the end of the day, everyone wins: the traveller, the travel manager and the organisation as a whole.”